As such, recent years has seen the development of transaction cards, such as credit cards, debit cards, smart cards, pre-paid cards, and the like, as a popular substitute for cash or personal checks. Initial transaction cards were typically restricted to select restaurants and hotels and were often limited to an exclusive class of individuals. The initial cards were difficult to store during long periods of extended use, since the initial cards were constructed of a soft easily alterable paper. As such, transaction card manufacturers began forming transaction cards from more durable material such as plastic.
With the advent of plastic credit cards, the use of transaction cards has rapidly increased world-wide. Transaction cards are now more readily available to the average consumer. The average consumer often prefers the transaction cards over traditional currency since the transaction card may be easily replaced by the card issuer if the user loses or misplaces the card or the card is stolen.
Transaction cards typically allow a consumer to pay for goods and services without the need to constantly possess cash. Alternatively, if a consumer needs cash, transaction cards allow access to funds through an automatic teller machine (ATM). Transaction cards also reduce the exposure to the risk of cash loss through theft and reduce the need for currency exchanges when traveling to various foreign countries. Due to the advantages of transaction cards, hundreds of millions of cards are now produced and issued annually.
The vast number of cards produced demands international standards for card dimensions (e.g., length, width, thickness, shape). For example, the International Standardization Organization (“ISO”) standardizes a transaction card's dimensions under standard ISO/IEC 7812, a standard which is accepted by all transaction card manufacturers industry wide. As such, the machines used to manufacture transaction cards vary little from one transaction card manufacture to another, in order that each manufacturer conforms to the industry standard.
As the number of transaction cards issued increases, so do the security issues surrounding transaction card transactions. Security concerns such as, fraudulent charges, credits, merchant settlement, and reimbursements, etc., have increased due to the increasing use of transaction cards. As a consequence, the transaction card industry started to develop more sophisticated transaction cards which allowed for the reading, transmission, and authorization of transaction card data, while lessening the elevating security concerns.
For example, many transaction card manufacturers are providing alternative transaction devices capable of being used in place of traditional transaction cards. Initially, the replacement transaction devices where manufactured in the form of smart cards, which were capable of transferring user information without the user every having to lose physical control of the device. Thus, smart cards enhance the security of the transactions by virtually eliminating the need for the user to hand the card over to a merchant salesperson for transaction completion.
While the advent of smart cards helped to alleviate some of the security issues surrounding transaction devices, smart cards did little to address fraud issues associated with a lost or stolen transaction card. This is true because the smart cards where manufactured with the same size dimensions as traditional transaction cards and, therefore, the user did little more to secure the smart card against loss than the user did to secure a traditional credit card, for example. More particularly, while the identical size dimensions between the traditional transaction card and the smart card has the cost advantage associated with permitting a card manufacturer to manufacture smart cards on traditional transaction card fabrication machinery, the disadvantage is that the smart card was still subject to similar theft and fraud concerns as a traditional card since smart card users typically would lose or misplace the smart card with similar frequency as with a traditional transaction card.
Thus, to alleviate the fraud cost associated with a lost or stolen transaction device, transaction card providers are searching for suitable technology which would permit a transaction to be completed without the cardholder having to relinquish control of the card, and which would provide increased means of securing the transaction device. One such technology is radio frequency identification (RFID) technology.
Like barcode and voice data entry, RFID is a contactless information acquisition technology. RFID systems are wireless, and are usually extremely effective in hostile environments where conventional acquisition methods fail.
In general, RFID technology permits a card manufacturer to provide for a dimensionally smaller transaction device than a smart card or traditional transaction card. RFID technology, therefore, is better suited for securing against loss or theft. For example, the RFID technology may be embodied in a form factor attachable to the account holder's person or to an often used (or often handled) personal article, such as a key chain, fob or tag. The RFID transaction device may be attached to the personal article in an unobtrusive manner because of its smaller size. As such, the user has increased security against loss or theft, since the user handles the personal article frequently, permitting the user to repeatedly be reminded that the card is present.
One of the more visible transaction device which uses RFID technology is found in the introduction of Exxon/Mobil's Speedpass® and Shell's EasyPay® products, which are attachable to a user's key chain. These products use RFID transponders placed in a fob or tag of irregular shape which enables automatic identification of the user when the fob is presented at a Point of Sale (POS) device. Fob identification data is typically passed to a third party server database, where the identification data is referenced to a customer (e.g., user) credit or debit account for completion of a transaction.
By providing a RFID transaction device (e.g., fob) as described above, transaction account providers are able to attract account users in increasing numbers. The account users often prefer account providers which offer the RFID transaction device option because of the convenience of use and the security using a RF transaction fob provides. As such, because of the increased popularity and benefits associated with RFID transaction devices, many banking and financing institutions, department stores, petroleum companies and other organizations have developed their own RFID transaction devices for use by the organization's consumers.